Crisis Leadership

Keeping track of the various crises facing us today can be exhausting and stressful. Medical doctors that I have spoken to talk about the enormous increase in the number of prescriptions they are writing for anti-anxiety medicines and the significant increase in various maladies associated with stress and anxiety they are treating. Without much effort, I listed a number of crises that we are currently facing from my admittedly liberal/progressive perspective, and of course I have no expectation that anyone need agree with this list completely, and I am absolutely sure I left off many crises affecting people both in the USA and around the world. These are not in any particular order in terms of threat, which can be debated, but certainly some of them rise to the top of the list in terms of urgency.

Leadership in times of crisis is critical, for methodical leadership, with a steadying hand, a trusted, wise, knowledgeable, truthful leader can give a population a sense that things will be alright. And in a nutshell, that last sentence summarizes a good portion of why we are having all of these crises at the moment.

During the last “great” recession (starting in 2007) I had the opportunity to conduct a body of research about how organizations can increase the amount of confidence in an employee population, that the appropriate actions were being taken to steady or right the ship and get through rough seas. This work was conducted quarterly with 15,000 full-time working adults in the world’s 12 largest economies which together represented about 75% of the world’s GDP. There were strong indications that the findings from this work would generalize to other populations, for instance citizens of a country or members of other kinds of organizations.

The research hypothesized that there were two critical components of confidence. 1. confidence in the organization in which you were part, and 2. confidence in your own personal situation. Each of those had an internal and an external component. So organizational confidence internal was about activities the organization was undertaking to improve internal functioning. Organizational confidence external was about changes the organization was undertaking to improve market position and attractiveness/relevance of products and services. Personal confidence internal was about your situation within your current organization, job security and opportunity to advance/develop. And personal confidence external was about your ability to land on your feet elsewhere should you have to leave your current employer. Skill development opportunity, staying current with technology and job prospects lived in that quadrant.

The research showed that higher levels of confidence, as defined above, was linked to a whole bunch of outcomes at various levels including:

At the personal level: intent to stay, consumer purchasing expectations

At the company level: financial performance, stock price, total shareholder return

At the industry level: bankruptcy filings

At the state level: level of unemployment

At the country level: change in Gross Domestic Product (GDP).

In other words, if you randomly sample a cross-section of people and ask them about their confidence according to the above paradigm, you are able to link up their confidence levels and perhaps predict to various measures which are tracked to determine organizational/group performance, whether that organization/group is a company, an industry or a country. If you can predict in a positive sense, the opposite would also be true. When confidence is lower, driven by lurching from one crisis to another, one could hypothesize that a self-reinforcing deleterious cycle is set-up lowering the performance of the organization.

And that seems to be where we are now. Ineffectual and poor leadership with an abundance of crises will lead to lower levels of confidence in America and lower levels of performance. Whether that performance is America’s ability to influence world events, the USA’s economic performance, or the stress and anxiety that individuals experience. It is all connected and there has been, for a very long time now, no ability to live in an isolated bubble. Global warming is not going to be solved by a handful of countries, it is going to take everyone working to solve that problem cooperatively. Russia’s interference will only be solved with a united front confronting their desire to destabilize the west. Being a country governed by the rule of law, can’t be achieved without the majority working towards that. And each of these issues will take solid leadership.

About ten years ago I was in discussions with a company about doing some work for them. They indicated to me that the CEO was a believer in mixing things us, creating chaos on a regular basis to keep people on their toes, to not let them get complacent. That was the argument anyway. When I mentioned that the evidence was very clear that what you get when you intentionally cause chaos is lower more chaotic performance they felt I was not a fit for doing work for them, because no one should bring forth evidence that the CEO’s pet theory was in error. Did I mention that one thing good CEO’s have in common is a desire to learn in order to improve their own performance?

There was another time, different company, very large NYC-based company where I was contacted and told that the CEO’s direct reports were having all sorts of problems working with him. He was not open to other’s ideas, he was arrogant, condescending. They asked if I could work with the direct reports to help them deal with the CEO. I mentioned that the problem might not be with the direct reports but with the CEO and that is the last I heard from them.

Point being with these two examples is that what we are experiencing today with our national leaders is not the first-time flawed personality traits, and unstable people have landed into leadership roles. It is estimated for instance that psychopaths account for a higher proportion of CEO’s and politicians than in the general population. They are attracted to positions of power and their charisma often makes them seem reasonable at first. But in order to pull ourselves out of the crisis mode we are constantly in today, very clearly, will take a change in leadership.